#11
In the vibrant and rapidly evolving landscape of East African telecommunications, few names resonate as powerfully as Safaricom PLC. As Kenya’s largest telco and a cornerstone of the region’s economy, Safaricom’s journey from a humble mobile network operator to a technology behemoth epitomises transformative growth and unwavering commitment to innovation.
With a market share commanding over 65.7 percent of the Kenyan telecom sector and a subscriber base of approximately 47 million as of 2024, Safaricom’s influence extends far beyond its core services, shaping the way Kenyans communicate, transact, and connect.
Founded in 1997 as a wholly-owned subsidiary of Telkom Kenya, Safaricom’s rise to prominence was catalysed by a strategic partnership with Vodafone Group PLC in 2000, which saw the British multinational acquire a 40 percent stake and assume management responsibilities. This partnership heralded the arrival of Michael Joseph as the first Chief Executive Officer (CEO), who played a pivotal role in steering the company through a period of unprecedented growth. Under Joseph’s leadership, Safaricom’s subscriber base ballooned from a modest 20,000 to an impressive 16.71 million by the end of his tenure in 2010.
This exponential growth was driven by a series of groundbreaking innovations, the most notable being the launch of M-PESA in 2007. This mobile money platform revolutionised financial services in Kenya, offering unbanked populations unprecedented access to financial transactions via mobile phones.
Following Joseph, Bob Collymore took the reins in 2010 and further entrenched Safaricom’s role as a driver of socio-economic development. Collymore’s tenure was marked by a focus on rural development and the expansion of mobile solutions that bridged the digital divide. Innovations such as the rollout of 4G internet, the introduction of M-Shwari (a savings and loan product), Fuliza (an overdraft service), and the establishment of MPESA’s Paybill and Till number systems facilitated seamless business transactions and financial inclusivity. Collymore’s commitment to fostering Kenya’s cultural scene led to initiatives like Safaricom Jazz and Skiza Tunes, which continue to support local artists and musicians.
In 2020, Peter Ndegwa became Safaricom’s CEO, bringing with him a wealth of experience in strategic leadership from his extensive career in the fast-moving consumer goods (FMCG) sector and financial services. Ndegwa’s tenure has been characterised by a bold vision to transform Safaricom into a fully-fledged technology company by 2025. This vision aligns with Safaricom’s current strategy of being customer-obsessed, purpose-led, innovative, and collaborative. Under Ndegwa’s leadership, Safaricom has not only maintained its dominant market position in Kenya but also expanded its horizons into new territories.
A significant milestone in Safaricom’s expansion was its entry into Ethiopia in 2022. This move marked a historic step for the company as it ventured into one of Africa’s largest untapped telecom markets. The investment into Ethiopia is already bearing fruit, with the subscriber base in the country growing to nine million as of February 2024. Ndegwa’s strategic foresight and focus on leveraging technology to enhance customer engagement and operational efficiency have positioned Safaricom as a key player in Ethiopia’s burgeoning telecom industry.
Financially, Safaricom continues to outperform expectations, reflecting its robust business model and strategic investments. In the fiscal year ending March 2024, the group reported earnings before interest and tax (EBIT) of KES 139.9 billion. Even with the startup costs associated with its Ethiopian operations, the group achieved a 3.5 percent year-on-year growth in EBIT, totaling KES 94.9 billion. The group’s revenue surged by 13.4 percent to KES 335.3 billion, driven largely by M-PESA, which contributed 42.4 percent of the revenue.
Safaricom’s commitment to sustainability is another pillar of its corporate philosophy. The company has been proactive in integrating sustainable practices across its operations, from promoting renewable energy to minimising environmental impact. Safaricom’s sustainability initiatives are not just about corporate responsibility but are deeply ingrained in its mission to create long-term value for its stakeholders and the communities it serves.
Leadership has been a defining element of Safaricom’s success, with Peter Ndegwa at the helm exemplifying transformative leadership. Ndegwa’s illustrious career includes notable stints at Diageo PLC, where he managed operations across 50 countries and drove significant growth in key markets like Nigeria and Ghana.
His strategic acumen and passion for customer-centric innovation have been instrumental in steering Safaricom through its next phase of growth. Ndegwa’s leadership philosophy is deeply rooted in his upbringing and professional experiences, which have imbued him with a strong value system and a relentless drive to deliver value to customers and shareholders alike.
In its journey of over two decades, Safaricom has consistently demonstrated its commitment to transforming lives through technology. As the telco continues to innovate and expand, its role as a catalyst for change in East Africa remains undiminished, embodying the spirit of #Twaweza – the belief that together, we can achieve extraordinary things.
